The National Day Rally And Our Retirement Adequacy

Lack Of Significant Changes

After the very high-profile Roy Ngerng incident and the relentless consultations (yeah, even some of the financial bloggers were invited to attend some retirement forums) and feedback on CPF policies, many were expecting some serious changes to boost the retirement adequacy of Singaporeans.

So it was surprising to some that this year’s National Day Rally did not really introduce any significant changes, maybe except for extending the Lease Buyback Scheme to 4-room elderly owners (which I will talk more about in a later post).

But not me. I expected it.

This is because we are going to have an election in around a year’s time. Seriously, if PAP doesn’t take advantage of the euphoria of the SG50 celebrations and reiterate how far they have improved the lives of Singaporeans over the past 5 decades, I am reallygoing to eat my shoe. 😉

And this means that the most substantial and visible goodies would only be announced next year. PM Lee has begun whetting our appetite by announcing the Silver Support Scheme in which handouts (cash) will be given to our poor elderly through a top-up to CPF LIFE/Minimum Sum. But details will only be announced in next year’s Budget and I am going to bet that eligible recipients would probably receive the first of these handouts just before the election. And next year’s NDR will also be the period when the increase in CPF interest rates would be announced, if ever there’s an increase in the near future.

Call me cynical if you want but the PAP is a political party and one of its main agenda has to be to stay in power. And just in case you are mistaken about my political leanings, I am hoping that the ruling party gets a good mandate so that PM Lee can usher in his successor with confidence. After all, they really have “listened” to the people (not sure if it’s entirely good though), slaughtered some supposedly sacred cows (PSLE & IPPT) and delivered on a few platforms (Medishield Life, PG Card & cooling the property market).

Singaporeans’ Retirement Adequacy

But in many’s views, the government has not done a good job at securing the retirement adequacy of Singaporeans.

Some people were appalled that with the CPF LIFE payouts and even after the various options of monetising his flat (rent out a room, sublet, right-sizing and Lease Buyback), the proverbial Mr Tan would struggle to get his hands on $2,000 every month during his golden retirement years.

I might offend some, but I am taking a very different stance. I feel that the government has done more than enough to help the average Singaporean retiree by providing this array of options.

I also understand that monetising the home is likely an unpopular tool and mostly a last resort for for him. And this could even be avoided. With an income of $4,500, Mr Tan could have set aside a portion of his salary to build an additional retirement nest egg. Secondly, he chose to withdraw half of his Minimum Sum at 55. This $75,000 which could have yielded another $600 if he had left it in CPF LIFE, making it much easier to have $2,000 every month from 65.

And lastly, if Mr Tan is lambasting the government for not being paternalistic enough to ensure that he can comfortably receive $2000 per month in retirement, is he also unhappy that the government doesn’t return him all his CPF monies by 55?

If that isn’t greedy or an irony, I don’t know what is.  🙄